A Commodity Oddity Sharing The Spoils

Surging commodity-trading volume has piled up tons of extra cash on exchanges. So the legions of small-fry individual traders at such places as the Chicago Mercantile Exchange, which projects up to $50 million in extra money this year from fees on trades and the like, want to skim off some of the excess for exchange members through dividends. The New York Merc's directors have tentatively O.K.'d such a switch, the Chicago Merc is mulling the notion, and the Chicago Board of Trade may follow.

But the dividend proposal has set off a din of protest that makes bidding in the pits sound like a lullaby. Objecting are big firms such as Smith Barney Shearson, which account for much of the exchanges' volume. The firms hold only a minority of the seats, so they would get only a fraction of the dividends. They favor the status quo, where the extra bucks usually go for things such as trading-floor upgrades. Says Smith Barney Managing Director John Benjamin: "It's sort of like Robin Hood, taking from one and giving to another." But if big firms are miffed, growls Chicago Merc board member Merton Miller, "let them set up their own exchanges." While that's impractical, at least they couldn't be outvoted then.